Yes but it sounds weird to me because Carmack has spent his whole life involved with games but has not been known for an interest in game AI before.
Plenty of games have NPCs with scripted routines, dialog, triggers, etc that could be improved either by reducing the dev cost to generate them without reducing quality or reacting to player behavior more naturally.
Don't forget there is a certain randomness with 'more natural' and with randomness you're going to invite Murphy to the party.
A weapons maker with a unique backstory and realistic conversations that reference it is more interesting than a bot, and opens up the possibility of unscripted side-quests.
Some significant part of gaming is risk-free experimentation in a simulated world. The experiments possible are bounded by the simulation quality of the world. More realistic NPC behavior would open up for a lot more games.
You would see these factions fighting and gaining/losing territory throughout the game. You could chose to help them or just pass on by, but the actions progressed regardless of your choice.
Games like PvE MMO's need to find a way to produce engaging content faster than it can be consumed at a pricepoint that is economically viable. The way they do it now is by having the players repeat the same content over and over again with a diminishing returns variable reward behavioral reinforcement system.
You have to hit a spot where they are sometimes a bit surprising, but not in a way that cannot be reacted to quickly on your feet. This throws realism out of the window.
The game may even be played by saying things on Twitter and becoming interesting enough that people DM you and try to build a relationship with you, while you're a bot.
While it's true that game AI is often held back by game design decisions, it's not true that technology isn't holding us back in this area as well.
[1] https://www.youtube.com/watch?v=gm7K68663rA (GDC Talk: Goal-Oriented Action Planning: Ten Years of AI Programming)
That's part of it, but there are other factors too. The more complex the AI, the harder (i.e. more expensive) the game is to tune and test. Game producers and designers are naturally very uncomfortable shipping a game whose behavior they can't reasonably predict.
This is a big part of why gamers always talk about loving procedural generation in games but so few games actually do it. When the software can produce a combinatorial number of play experiences, it's really hard to ensure that most of the ones players will encounter are fun.